Solar Guide

The Massachusetts Residential Renewable Energy Tax Credit is a state tax credit that helps homeowners save money when they install solar panels, wind turbines, or other renewable energy systems at their primary residence. This credit allows you to reduce your Massachusetts state income tax by 15% of what you spend on qualifying renewable energy equipment and installation, up to a maximum credit of $1,000.

To qualify, you must be a Massachusetts resident who owns or rents your primary residence and is not claimed as a dependent on someone else’s tax return. The credit applies to the net cost of your renewable energy system after subtracting any federal tax credits and government rebates you receive. Your renewable energy equipment must be new, expected to operate for at least five years, and used primarily for residential purposes like heating, cooling, hot water, or electricity generation.

If your credit amount exceeds your state tax liability in a given year, you can carry the unused portion forward for up to three additional years. Joint property owners can share the credit based on their ownership percentage, but the $1,000 maximum applies per residence. Keep in mind that structural components like roofs, windows, and walls don’t qualify, even if they help with energy collection – only dedicated renewable energy equipment and installation costs are eligible.

Massachusetts offers a property tax exemption for homeowners who install solar energy systems on their property. This state-level incentive exempts the added value of your solar system from your annual property tax assessment, meaning you won’t pay additional property taxes on the increased home value that comes from installing solar panels.

The exemption applies to solar systems that meet specific size requirements: systems that produce no more than 125% of your property’s annual electricity needs, or systems with 25 kilowatts or less in capacity (verified by state documentation). The tax exemption lasts for 20 years from installation, though municipalities can agree to extend this period. To qualify, your system must be owned or leased and located on your residential property. The exemption does not apply to utility-scale solar developments or systems owned by electric companies.

The Solar Equipment Sales Tax Exemption in Massachusetts eliminates the state’s 6.25% sales tax on solar energy equipment purchases. This means homeowners can save hundreds or thousands of dollars when buying solar panels, inverters, batteries, and other solar system components, as they won’t pay the standard sales tax that applies to most retail purchases.

All Massachusetts residents are eligible for this exemption when purchasing qualifying solar equipment. There are no income limits, system size restrictions, or application processes required. The exemption applies automatically at the point of sale, so homeowners see the savings immediately when making their purchase. This incentive works alongside other solar programs and can be combined with federal tax credits and other state incentives to maximize overall savings on solar installations.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage systems to help reduce strain on the electrical grid during peak demand periods. When you enroll your home battery system, Mass Save utility sponsors can automatically draw stored energy from your battery during high-demand summer days, typically when air conditioning use is highest. In return, you earn $275 per kilowatt (kW) for your battery’s average contribution during these events.

For a typical 5-kW battery system, homeowners can earn up to $1,375 per year. The program runs from June 1 to September 30, with events occurring between 3:00 p.m. and 8:00 p.m. on non-holidays. Your battery will be called upon no more than 60 times per summer, with each event lasting a maximum of three hours. To participate, you must be a customer of Cape Light Compact, Eversource, or National Grid, and install an eligible battery system from approved manufacturers like Tesla, Enphase, SolarEdge, or others listed in the program. The battery can be installed with new solar panels, added to existing solar, or installed as a standalone system. Systems must have inverters smaller than 50kW, and the program also offers 0% financing up to $25,000 for battery installations.

The Solar Massachusetts Renewable Target (SMART) Program is Massachusetts’ main state incentive program that pays solar system owners monthly cash payments for the electricity their solar panels produce. This tariff-based incentive is paid directly by your utility company (Eversource, National Grid, or Unitil) and runs for 10-20 years depending on your system size. The program uses a declining block structure, meaning incentive rates decrease as more solar capacity is installed in each utility territory.

The financial benefit varies based on several factors including your utility company, system size, location type, and which capacity block your project falls into. Base compensation rates were set through competitive procurement, but current rates may be $0.00 in some blocks due to higher electricity prices and the program’s declining structure. The program offers additional payment adders for qualifying projects, such as energy storage systems, agricultural installations, brownfield sites, and low-income properties. Homeowners can use DOER’s Value of Energy Calculator to estimate potential payments for behind-the-meter systems.

To be eligible, your solar system must be interconnected with one of the three participating utilities and receive approval from the Solar Program Administrator (CLEAResult) and DOER. Projects are categorized based on land use and installation type, with specific siting rules that may limit multiple projects on the same property. The program has a total capacity limit of 3,200 MW across all utilities, and applications are processed on a first-come, first-served basis within each capacity block.

Important considerations for homeowners include that some current applications may receive $0.00 incentive rates due to the program structure, and DOER advises working with installers to evaluate direct participation in the RPS market as an alternative. The program requires specific metering equipment and ongoing reporting requirements. Applications must go through CLEAResult’s online portal, and certain adders like agricultural or brownfield require pre-determination letters from DOER before applying.

Net Metering in Massachusetts allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the grid. When your solar system produces more power than your home uses, that extra electricity flows into the utility grid and you receive credits on your electric bill at the same rate you pay for electricity (1:1 credit). This means every kilowatt-hour (kWh) of solar energy you export earns you the same credit as what you would pay to buy that same amount of electricity from your utility.

The financial benefits vary slightly by utility company. For National Grid, Eversource, and Unitil customers, excess credits carry over from month to month indefinitely as dollar values with no annual expiration – however, you won’t receive cash payments for surplus credits. Taunton Municipal Light Department operates differently with monthly settlements, where excess production above your monthly consumption is credited at a lower generation rate of approximately 6.5-9.5 cents per kWh rather than the full retail rate.

Net metering is automatically available to solar customers in Massachusetts, with no special application required beyond your standard solar interconnection process. The program has no expiration date, making it a reliable long-term benefit for homeowners considering solar energy systems.